It's
pretty clear right now that the problems that we're facing are not
going to correct themselves. The fact that we've seen the number
of people who are without insurance grow, in part, reflects the
problem we have relying on employer-sponsored insurance in an era
when that may not make much sense for at least all of the under
65 population. We have an aging population. Seventy-eight million
Baby Boomers are going to start to retire at the end of this decade.
That'll put enormous stresses on the pension and Medicare system.
We need to think about what makes sense for the 21st century, whether
or not it's what made sense for the 20th century. And we keep having
advances in medical technology and ways to keep people alive longer,
so that raises a whole set of questions that we haven't dealt with.

Are
there opportunities inside this crisis?

There
are peculiarities in how we have insurance coverage today that we
probably wouldn't duplicate. It may be possible that we can evolve
into a more sensible strategy over time. It's important to have
an idea about where you want to go, what you would like health care
financing delivery to look like. It's just how you get there and
whether you attempt to displace or destroy what you have now, which
works pretty well for large numbers of the population. That's something
we're not inclined to do, as opposed to making gradual steps and
improvements to try to get to a better type of delivery system.

Do
ethics play or should they play a role in
health care policy?

Ethics
will always play some role for the individuals who are involved.
Ethical decisions get raised in hospitals on a daily basis, in the
life and death decisions that are involved between the physician
and a patient. The real question that people frequently mean is,
should ethical issues be a part of national health policy? It's
a hard question to answer, but I believe they really won't be in
the sense in which people generally use the term. And I think that
because we are a very different, heterogeneous population, very
different background ethnically, religiously, racially, very different
views about the appropriateness and efficacy of medicine. And I
think it would be very difficult for us to have a single uniform
policy with regard to rationing of health care, that is, limiting
on an official policy health care that the medical system thought
was beneficial. I don't see that we would be able the do it.

Talk
about your ideas on government assistance.

When
I look at the issue of social obligation or a sense of responsibility,
it seems to me we are clearer for some populations. I believe most
people would agree that the poor, and there are a lot of discussions
about exactly who you put into that category, will need some or
a lot of help in terms of financing their own health care. When
it starts becoming more difficult is as people rise up the income
scale, should they be paying for their own health insurance coverage
or do they need some subsidy, some help? And should there be the
same amount of assistance no matter how wealthy or how poor those
individuals are? For my own values, I wish we would start with the
lowest income. It seems to me that is an area in which there is
widespread agreement, and one of the great frustrations I have is
in the '93-94 period, both Republicans and Democrats included legislative
proposals that at least included everybody below the poverty line
and frequently substantial subsidies for people up to 150 percent
of the poverty line. And yet there wasn't a willingness to say,
"Even if we should do more, let's at least make sure we do this,"
because it had been, as far as I can remember the first time, that
both political parties were on record as saying there should be
a minimum benefit package for at least the very poorest. To my mind,
it was just shameful that we let that period slip away. These opportunities
come along, we ought to take advantage of them, make progress and
then come back to the table.

Why
is maintaining the status quo bad?

There
are some problems we can see right now, mostly for the individuals,
some stresses and pressures for the provider community, but they
seem to generally be able to take care of themselves pretty well,
as we can see from this last give-back of $16 billion in refinements
to the Balanced Budget Act. But there are some individuals who are
clearly at risk. Whether or not it will be an issue will depend
on what else happens, where they live, whether they actually get
a major illness. People without insurance coverage are at risk.
They may only have routine expenses and if they're not poor or very
poor, they should be able to take care of routine expenses. Even
if they're middle or upper middle class, if they start having a
serious medical illness, that can present some real financial problems.
So those individuals are at risk and some number of them will have
real problems. The aging of the population's going to have a lot
of repercussions. We have this bulge in the age distribution of
the population, the people who were born between 1945 and 1965 who
are aging and beginning to edge near retirement, and we need to
think about how to sensibly pay for the pension and health care
needs of an older population. I think it's going to cause us to
re-think whether or not we're serious about social insurance.

Talk
about Medicare.

There
are a number of problems with Medicare. Let me say first as somebody
who's formerly Director of Medicare, it's a very popular social
program and it has accomplished the major objective that it was
set out to accomplish, which was to make sure that seniors had access
to medical care. So when I criticize it, it's almost in a friendly
benighted way rather than as a major criticism. But it's a peculiar
program, because it doesn't provide any catastrophic protection.
That's a very odd insurance program. It doesn't now cover what we
regard as part of mainstream coverage, that is, outpatient prescription
drugs. And even more importantly, the level of coverage is not enough
for the poorest and probably more than needs to be for the wealthiest
among the seniors. I don't see us willing to publicly finance a
program that covers for all seniors what the poorest seniors need.
I don't want to turn it into a welfare program. I think there are
good arguments for losing the support of mainstream population if
you make it into a welfare program. But I think you can have a sliding
contribution that the government makes as people's incomes increase.
We do it all the time in the tax system, so this is not a new concept
.

We
pay twice as much for healthcare as any other country. Why?

There
are lots of reasons. We're an inpatient population. We're very keen
on new technology and procedures, and we don't have to want to wait
for them or have to travel long distances. I think we will always
spend substantially more relative to our Gross National Product
than other countries. And as a wealthy industrialized country, there
isn't any reason why we ought not to allow ourselves to do that.
The question that we ought to ask is whether or not we think we're
getting our money's worth. Do we have good incentives built into
the decision-making about spending on health care. I think that's
the much more important. Much of what we buy in health care has
very little to do with life and death at the moment. It has a lot
to do with convenience, information, assurance for the worried well
or the worried sick, and a lot about quality of life

Where
do you see this going in five to ten years?

I think
we are going to actively struggle early on with the issues of the
uninsured and the role of employer-sponsored insurance in the 21st
century. It is going to be very difficult to avoid this. Even in
our prosperous economy we see the number growing. If we at some
point have a slow-down in the economy, let alone anything as serious
as a recession, those numbers are likely to jump up in a substantial
way. We have to think about what makes sense for people who aren't
offered employer-sponsored insurance because they're part-time workers
or full-time entrepreneurs. What is the appropriate responsibility
and obligation of the individual? Do we want to try to encourage
employers to offer insurance who now tend not to, such as small
employers, low wage employers? Or is it something that we want to
try to make available to individuals through some mechanism? What
are we going to do for people who are primarily low income? Are
we going to continue what we've started with the children's health
insurance program that is part of the states' programs? Are we going
to let some people go without insurance coverage if they choose
to go without insurance coverage? Do we need something for catastrophic
care available? I think we're going to start, once again, to look
at these issues. We did it in 1993-94. I just hope we're a little
more honest with ourselves about what we really are willing to pay
for and for whom.

We're
in the most prosperous time in the nation's history and yet the
number of uninsured has doubled in the last ten years in this country.

Well,
the issue of doing away with a mechanism that provides health insurance
to large numbers of the under-65 ought to be approached very gingerly.
I don't know very many people who would today advocate starting
an employer-based insurance system. Economists, such as myself,
believe that the employer contribution is just part of the compensation
package which would otherwise go to the employee. So it's really
the employee's money that the employer is spending. They do so because
of tax provisions that encourage part of the compensation to be
provided as this kind of fringe benefit. It tends to have the employee
think it's free and not care about what happens.

The
question about why the numbers of uninsured have increased during
this time of prosperity also need to be thought about in terms of
the income groups that are affected. There are some individuals
who are transitioning off welfare who are not on Medicaid now and
going into jobs that do not provide insurance coverage as part of
their job. Now some of these individuals actually could continue
to be on Medicaid, but for a variety of reasons have chosen not
to do that. For some other individuals, we're beginning to see something
that had not been present in the 10 or 20 years before. It's not
a large number, although it might be as many as 20 percent of the
working uninsured, of people who were offered insurance employer-sponsored
coverage and said, "Thanks, but no thanks." Presumably, their contribution
was larger than they were able or willing to spend in terms of buying
insurance coverage.

One
of the lessons that I really learned when I was running Medicare
and Medicaid is the different attitude toward government that exists
around the country. I grew up in the Midwest and I have spent much
of my adult life in Washington and in the Northeast, and in both
those places people tend to not be quite as mistrustful of the government
as they are in other parts of the country. When I would go out to
places like Wyoming or Montana or South Dakota, I was really surprised
to find out for many of the individuals in the provider communities,
how much they basically thought the problem was the federal government
and that if I would get out of their way, they could resolve their
problems on their own, thank you. It's not a question of whether
that's right or wrong. It's important to remember that we are a
very big and diverse country with very different attitudes toward
social responsibility and government responsibility and the appropriateness
of government in various spheres of our life. And if we ignore that
when we're trying to resolve these very difficult social issues,
the chances are they aren't going to get resolved.

The
President of Humana stated back in the '80s that he wanted to have
health care as consistent as a McDonald's hamburger.

There
are a lot of issues that we need to deal with. Making sure that
good outcomes are the expectation and the result, lowering medical
errors, reducing complications because of inappropriate use of pharmaceuticals
or drug interactions is very important. I don't know that most people
would necessarily feel comfortable with the notion of the McDonald
analogy to health care, but the idea that you ought to feel pretty
comfortable that you will have a good product or service reliably
provided each and every time you go is not a bad goal for health
care.

Are
things in health care better now than
they were 25 years ago?

I think
things are much better in many dimensions now than they were 25
years ago. Our romanticizing Marcus Welby ignored the fact that
house calls made sense when there wasn't very much you could do
anyway and so allowing people to stay in the comfort of their houses
made a lot of sense. When you have somebody who's really sick now,
you want them in an emergency room environment or an intensive care
environment where there are many things that can really make a difference
that you're not likely to be able to pick and carry with you into
someone's home. But we have some problems. I think we would do well
not to always flagellate ourselves with our problems and remember
some of our successes, but to get serious about what we're willing
to do to resolve some of the problems with regard to the uninsured,
especially the poorest uninsured. Let's start with them first. Think
about what we want to do with the aging Baby Boomer population,
and then worry about long-term care. And if I had my druthers, I'd
do it in that order.

Bruce
Vladeck said that if you're rich, you get healthcare, if you're
poor, you don't. What do you think about the two-tiered system approach?

I think
if you're rich, you get care. Some of it's very good. Some of it
probably isn't, but you get a lot of it. I believe if you're poor,
you are usually able to get, a fair amount of care, a lot of care
in some cases, some of which is very good, some of which is not.
Some of the lower middle class probably are at the most risk. They
may not have insurance or their insurance may not be as complete
and they're not easily eligible for assistance. That's probably
our biggest problem, the lower-middle income working uninsured population
or maybe even underinsured population.

Vladeck
also described the Medicare industrial complex. Can you comment
on the trillion-billion of health care in this country.

$225
billion being spent on Medicare and the provider community wonders
why the government is bothering them. It's a lot of money. Much
of it is well spent. Some of it is not. It is reasonable and appropriate
to go after fraud and abuse. It's a very complicated program, enormous
amount of regulations. It frustrates a lot of people. One of the
concerns I have had is even when run by well-meaning, hard-working
people, is it really possible to have the federal government decide
on the appropriate price for each unit of service, and whether the
quality with which it occurred was appropriate? This goes to the
issue about what we want Medicare for the 21st century to look like.
But being vigilant about making sure that what the government is
funding is really provided and was needed and was provided at an
acceptable quality level is an appropriate role for government even
if it irritates some of the people on the other side.

To
the extent that the health care system makes it possible, should
the child of a gas station at attendant have the same chance of
dying of particular illness as a child of a corporation executive?

It
may depend a little bit on what the risk is being caused by. And
let me share that with you. We ought to be making sure that people,
particularly the lowest income among us, have basic coverage. Doesn't
necessarily mean that it has to be government funded, but we ought
to make sure of that. I am less concerned about multi-tiers as long
as what we're providing for the lowest income is acceptable to us
as a country in terms of what it provides and the quality of care
with which it is provided. There will be some areas of illness where
in order to try and resolve that illness will involve taking great
long shots using technology that is at the cutting edge or still
in experimental stages that will involved even therapeutics that
are the equivalent of hail-Marys in medical care. And I think it
is not reasonable to say we won't let a rich person spend their
money that way, if they want to. I think it is unreasonable and
unlikely that we would do that for every individual in our country.
And if we get too hung-up on that issue, we'll never resolve the
fact that we a have a third of our uninsured population who are
at or very near the poverty line. That's something surely we can
fix.